The offer, increased by A$0.35 to A$3.20 a share, was
extended until February 22.

Resource Pacific Managing Director Paul Jury told Reuters
the new offer was "unimpressive" and his board was advising its
shareholders against taking any immediate action while it
prepared a formal response to the sweetened offer.

"I see Xstrata's offer as a sign of desperation," Jury
said.

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Xstrata in December launched its first offer for Resource
Pacific at A$2.85 a share, trumping an all-share offer from
another Australian coal miner, New Hope Corp <NHC.AX>. Resource
Pacific earlier on Friday formally rejected that offer. A
company spokeswoman said a response to the latest offer was
under discussion by the company.

Resource Pacific has said that an independent assessment
had valued the firm's shares at between A$3.56-A$4.09 a piece,
with a preferred value of A$3.82 a share.

Shares in Resource Pacific, which has a market value of
about A$1 billion, ended 0.7 percent higher at A$2.98, with the
increased offer coming after the close of trade on Friday.

Xstrata <XTA.L> has been one of the most acquisitive-minded
foreign companies in the Australian resources industry since
buying MIM Holdings' zinc and copper mines in 2003, and its
move on Resource Pacific Holdings <RSP.AX> comes as coal prices
rocket amid a supply shortage.

Resource Pacific operates the Newpac coking and thermal
coal mine, which neighbors Xstrata mines in the Hunter Valley
region of New South Wales state.